Lawmaker criticises overseers of Bank of England during crisis

* BoE publishes records of financial crisis discussions

* Top lawmaker says BoE lacked "board worthy of the name"

* Minutes show poor relationship with other UK regulators

* Failings led to shake-up of UK bank supervision

By David Milliken

LONDON, Jan 7 (Reuters) - Officials charged with overseeingthe Bank of England failed to hold the central bank to accountduring the 2007-09 financial crisis and may have made mattersworse, a senior British lawmaker said on Wednesday.

The central bank published nearly 500 pages of minutes ofmeetings of its Court, a body which was meant to help setstrategic direction and act as a check on its governor, who atthe time of the crisis was Mervyn King.

The minutes of the Court and its subcommittees tally with apicture shown in other reports of a central bank struggling todeal with Britain's first bank run in more than 100 years in2007 and trying to stop a broader collapse in October 2008.

King said in May 2012 that the BoE had failed to properlyidentify and warn about risks facing banks in the run-up to thecrisis, something he linked to it losing powers to directlyregulate banks in 1997.

However, he noted the central bank took numerous steps toensure banks had enough liquidity and urged them to rapidlyincrease their capital levels.

At the time, responsibility for Britain's financial systemwas split between the BoE, the finance ministry and theFinancial Services Authority -- a body which was scrapped in2013 as part of a shake-up of bank supervision.

The BoE now has primary responsibility for financialstability, and Andrew Tyrie, a lawmaker who chairs a parliamentcommittee which monitors the central bank, said the BoE stillneeded to make more changes to how it supervises itself.

"The minutes show that during the crisis the Bank of Englanddid not have a board worthy of the name. This mattered. And itstill matters," said Tyrie, one of the most vocal critics of theway the Bank of England is run. He has long pressed for atougher oversight regime.

The BoE's current governor, Mark Carney, announced somechanges to the Court last month that Tyrie said were a step inthe right direction.

The minutes show how, after the collapse of mortgage lenderNorthern Rock in late 2007, the BoE moved towards the conclusionthat the three-way split of regulation was not working.

By early 2009 -- shortly after the BoE had had to deal withthe near-collapse of two much larger lenders, Royal Bank ofScotland and Lloyds -- officials werecomplaining that the FSA had failed to share information.

But Tyrie said the minutes also showed the Court hadreinforced King's decision to shift the BoE's focus away fromfinancial supervision in the run-up to the crisis.

"Non-executive directors appear to have done little thinkingof their own about financial stability and to have added littleor no substantive value to the Bank's work on it. They may haveachieved the opposite," Tyrie said.

The minutes showed that in April 2008 there was "somereluctance" at the idea of the Bank taking on newresponsibilities, "particularly in view of the challenges itfaced in relation to monetary policy."

Non-executive directors seemed more focused on coveringtheir backs than helping the BoE during the crisis, Tyrie added.

Non-executive directors of the BoE at the time includedtrade union leader Brendan Barber, Labour politician Paul Mynersand numerous business executives such as Roger Carr, who is dueto take over as chairman of arms company BAE Systems.

The minutes do not identify directors' individual comments.

They also show banks appeared unwilling to heed the BoE'smuted warnings about risks before the crisis. (Additional reporting by William Schomberg and Steve Slater;Editing by Ruth Pitchford)